Town Square

Borenstein, Truth or Fiction on Pensions ?

Original post made
by East County Watch, another community,
on Mar 14, 2012

Lately there have been several comments on the Danville Press by bloggers that accuse Dan Borenstein of publicizing and writing incorrect information regarding unfunded liabilities and lack pension reforms for public employees. I would like to open up dialog to those who have factual information that disagrees with Bornstein's work. Please provide links or documents that contradict Mr. Bornstein's work.
Also, if you agree that he is dead on with his research and articles please say so.

* Please state to the facts and refrain from personel attacks so the blog can continue and not be shut down. All comments are welcome with proper backing.

Posted by Taxpayer
a resident of another community
on Mar 14, 2012 at 11:53 am

I have read BANG editorials and more specifically Dan Borenstein's reporting with interest for many years. Not once have I seen him incorrectly report facts. He does draw conclusions that are open for dispute, but in the vast majority of examples I have found him to be very well reasoned and accurate.

Don't expect those who benefit from the disparity between public and private industry pensions to agree with him. For obvious reasons it is all but impossible for public employees to appreciate that the system is so fatally flawed.

The more it is reported and discussed the sooner the system will be fixed. It won't be soon enough, but it will happen. And both sides of the discussion will help bring that about. I have found that beneficiaries of a public pension system arguing on behalf of the system help bring focus to how flawed it is.

I appreciate Mr. Borenstein's work and find those who attack him with name calling actually further his cause.

Posted by Informed Resident
a resident of another community
on Mar 14, 2012 at 2:14 pm

@ Taxpayer, Based on what? I have found that most officials, employees and citizens that deal with what he writes about find his articles consistently erroneous. Personally & professionally, I find his work completely incorrect and purposely misleading almost 100 percent of the time. In case you were wondering, how I qualify my position; I have had numerous dealings with him as well as the agencies he reports on.

@ East County Watch,

I suggest you do your own homework. Perhaps you can start here;

The information is all available in black and white, which completely is at odds with what Borenstein spews;
CalPers; Web Link
Boycott the Times; Web Link
Contra Costa Board of Supervisors Agenda's and Documents; Web Link
Contra Costa Lafco; Web Link

Posted by Informed Resident
a resident of another community
on Mar 14, 2012 at 2:15 pm

After you are done chewing on all of that, here is one perfectly blatant example; Excerpts from two different articles, from two separate writers. Dan Borenstein, and Lisa Vorderbruggen. They write for the same paper (CCTimes/BANG). Both wrote these articles last month. However as you can see the amounts cited are completely different.

What should capture your attention is that Ms. Vordebruggen's figures were truthful and factual as pointed out yesterday in official county documents and reported here. Web Link

That is right, at the end of 2010 the county debt was 1.3 billion and now is currently down to $968 million.

So you might want to ask why is Mr. Borenstein reporting debt as between 1.5 and 2.4 billion when in reality it is down to 968 million?Web Link
His actually reporting;
"Meanwhile, unfunded pension liabilities have approximately doubled in the past five years, to more than $1.5 billion, due to investment losses and actuarial changes… Also, the unfunded liabilities are probably more than $2.4 billion. The separately run county retirement system uses unrealistically high assumptions about future returns on investment of pension funds. And the county uses a similarly optimistic forecast when calculating retiree health benefit liabilities."
- Daniel Borenstein, Feb. 5th 2012

While Ms. Vordebruggen reported the following (accurately) two weeks later;
"Contra Costa County's pension investments fared better than nearly every other California public retirement system portfolio last year, but the return rate still fell far below what is needed to pay the bills." "The Contra Costa Retirement Association's annual earnings plummeted 26.5 percent into the red in 2008. They rebounded 22 percent and 14 percent in 2009 and 2010, respectively, only to slow to 2.7 percent in 2011."
"The association's unfunded liability was $1.3 billion as of Dec. 31, 2010." -Lisa Vorderbrueggen,Feb, 22, 2012Web Link

...and 968 Million yesterday!

Perhaps a better topic might be to reveal what level of educational and financial qualification Mr. Borenstein possesses, since he is constantly second guessing the experts who do accounting for a living. The only thing better would be to post his pay, personal financial standing, and portfolio. He seems to have no problem doing that for public employees….

Posted by East County Watch
a resident of another community
on Mar 14, 2012 at 3:58 pm

@ IR,

I read the editorial today after posting and reading your comment earlier on the other blog. I have a very serious question for you.

In today's editorial, it stated that Cal Pers was recommended by professionals to reduce the expected rate of return from 7.5% to a more realistic number. The board ignored that suggestion as the editorial states and left it above 7%. It also stated that the fund is only 75% solvent.

Please tell me why 7% or 7.5% is a reasonable and logical expectation for the rate of return on pension investments? If so, please direct me to any place with an ounce of security that I can invest and get that 7% return?

Secondly, if the fund is solvent by more than 75% in assets as claimed, where can I find a factual document stating otherwise?

Posted by Informed Resident
a resident of another community
on Mar 14, 2012 at 4:54 pm

ECW,
This might help…
While I have not researched it myself, I read this today(below), and linked you to it. It certainly merits a follow up don't you think?

"More lies from the Borenstein Editorial Page today. First, the CalPERS fund is currently worth 236 billion or approximately 82-83% funded-not 75% as Mr. Borenstein states. Secondly, there were two recommendations made to the CalPERS Board, not one. The first recommended a return rate of 7.25% and the SECOND (which they went with) recommended 7.5%. Ol' Dan is also getting quicker about deleting comments under his stories when they don't agree with his "facts". The Contra Costa Times must be taking their Free Speech lessons from China these days."

As far as your second question, I would direct you to any investment company or brokerage house (eg; Charles Schwab, Prudential, Fidelity, etc.,) who would be happy to get you into an index fund such as the S & P 500. You will see that on an average the historical return since 1950 was 10.8%. Web Link …and for the record most savy investors know the S & P is far more secure than any bank you have your money in.

Your last question you will have to research yourself on the link I provided on the post above. Just because Borenstein is lazy doesn't mean you have to be.

Posted by The Boss
a resident of another community
on Mar 14, 2012 at 4:55 pm

I don't understand the comment above that challenges Borenstein to post his earnings information in response to him, as a reporter, reporting on the earning of public employees.

We, the taxpaying public, are the employers of these public employees and as such have every right to know how much we are paying (and obligating ourselves to pay in the future) for their work.

Reporters, on the other hand, are private citizens employed within the media. They actually deserve and have more protection under our Law than other private citizens. Anyone who believes his credibility requires sharing personal information like that either has not thought it out or hankers for a totalitarian regime. Scary!

Public employees work for the taxpaying public. You can be as offended as you wish, but you can't change it.

Posted by Informed Resident
a resident of another community
on Mar 14, 2012 at 4:59 pm

ECW,

This might help…

While I have not researched it myself, I read this today(below), and linked you to it. It certainly merits a follow up don't you think?

"More lies from the Borenstein Editorial Page today. First, the CalPERS fund is currently worth 236 billion or approximately 82-83% funded-not 75% as Mr. Borenstein states. Secondly, there were two recommendations made to the CalPERS Board, not one. The first recommended a return rate of 7.25% and the SECOND (which they went with) recommended 7.5%. Ol' Dan is also getting quicker about deleting comments under his stories when they don't agree with his "facts". The Contra Costa Times must be taking their Free Speech lessons from China these days."

As far as your second question, I would direct you to any investment company or brokerage house (eg; Charles Schwab, Prudential, Fidelity, etc.,) who would be happy to get you into an index fund such as the S & P 500. You will see that on an average the historical return since 1950 was 10.8%. Web Link …and for the record most savy investors know the S & P is far more secure than any bank you have your money in.

Your last question you will have to research yourself on the link I provided on the post above. Just because Borenstein is lazy doesn't mean you have to be.

Posted by Another Boss
a resident of San Ramon
on Mar 14, 2012 at 6:21 pm

I too am also concerned about anyone that pays the salary directly or indirectly to public employees including but not limited to politicians have access to what they receive in income and benefits. It is my taxes that they enjoy. Since the commenter does not pay Bornstein's salary he or she has no right to know. This person must be or has been a public employee.

Posted by [removed]
a resident of another community
on Mar 14, 2012 at 6:22 pm

Dear Editor,

As I shared with Daniel, Lisa and you, news services have found exceptional questions in the calculations of obligations especially within the accounting methods and disclosure documents of CCCERA. As a journalist, it would be a service to interview Marilyn Leedom, CEO, CCCERA, and provide the best view of today's obligation to current and future retirees and the real average CURRENT yields on funds investment.

It is a starting point that will lead to all obligations and calculations. Otherwise this is a discussion of opinions, published and by your sponsored pseudonyms.

Posted by GG
a resident of another community
on Mar 14, 2012 at 9:11 pm

I find it interesting that Mr. Borenstein hasn't written any article(s) concerning the University system and the pay schedule for their Faculty versus the outrageous tuition hikes for the students. Or could that be because Mr. Borenstein's brother is on the Faculty for UC Berkeley, and we don't want to point fingers at family members?

Posted by East County Watch
a resident of another community
on Mar 15, 2012 at 9:48 am

@IR, I was looking for facts to contradict Borenstein's work backed by documents not your opinion. You still can't seem to provide this for whatever reason. Then I read todays paper with an article by John Woolfolk with the help of three other reporters non of who are Borenstein. What is interesting is the similar warnings of doom in the pension system unless it is dealt with more. The real enjoyable part was that the Board is going to review and probably lower the expectation of returns another quarter percent. This makes your informed residents arguments regarding the pension problem worthless. The Board has been advised that a more realistic number is 5% on the return rate. In fact the return rate for the past ten years is 5.1%. You can see how your fictional theory of 10.8% through the stock market and other low rated bond gambles are a pipe dream and unrealistic. If the Board dropped the return rate to reality at 5%, correction of this magnitude would immediately place several government entities in bankruptcy status. Even the small quarter percent will increase our counties debt by millions of dollars. This is another blow to informed residents fictional theory that the Supervisors are heroes bringing the debt down. The pension board can make villains and heroes at the stroke of a pen. That is not a good feeling for our future generations. At least the pressure is on to make corrections before the bottom falls out and new firemen and policemen would be working for minimum wage with great benefits. Let's take the greed out and get realistic before it's too late.

Posted by Saw what?
a resident of another community
on Mar 15, 2012 at 12:59 pm

ECW, it's clear you are not here to find or discuss solutions. The point for you is to complain. Even in the face of a 2/3 reduction in the overhang during the worst economic period in our lifetime, you still manage to find fault.

Taking a 10 year snapshot is not honest discussion of the issue. How many pensions do you know of that are funded and distributed over a 10 year period?

If you don't like the pension program, then instead of constantly whining, how about suggesting a solution? Because all I see here is you basically saying you don't want public employees to have one at all. If that's the case, then pay them skill set equivalents of the private sector at the same time you move them to alternative retirement solutions.

But my guess is that even that will not be good enough. Your motive is punitive, much like chip-on-his-shoulder Dan. You not only want to kill public pensions, but pay them peanuts so they are basically sub living wage slaves. The "they work for me" mantra is tell-tale condescending proof. It's also a ridiculously dumb way to paint the picture. Does the waitress at your favorite restaurant "work for you" too? Because the math works out that you would pay a higher percentage of her wage than you would a public employee in Contra Costa County.

But neither you nor sour Dan can ever seem to verbalize what makes services provided by public employees somehow holier than a service provided through the private sector. One is through tax revenues and one is through disposable income. Both come from the citizen's pockets. So how about using your noodle to resolve your inconsistency in the treatment of those dollars?

You can tap dance around all you like, but after weeks of reading this stuff it is pretty clear where you are headed. You, like Mr. Dan, feel some subconscious or otherwise need to put public employees under your heel.

It's shameful.

Slamming public pensions by newspapers and the non-thinkers who follow these hack reporters is a joke. For one, it is costs that are beyond the control of anyone within that system(health care, primarily) that are the drivers. It's not the hard working employees who are at fault. Though you would never know that by reading a Dan Borenstein piece.

ECW, do you even know what the average CALPERS pension is to be making the closing statement that you just did? I'll give you a hint: it's less than $30k. Know anyone who can live high on the hog in the state of Calif on less than $30k?

Posted by East County Watch
a resident of another community
on Mar 15, 2012 at 2:22 pm

@ Say What,

My complaints are the same as most private sector tax payers. With that I will rebut a couple of your silly comments as follows;

"Taking a 10 year snapshot is not honest discussion of the issue"
This comment came from the news article. It is not anymore dishonest as thinking the fund will get 7.5% on its money.

"If you don't like the pension program, then instead of constantly whining, how about suggesting a solution?"

Really, I have been, either pay the actual realistic annual return rate price as you go or reform the pension annually or every couple years. It is economics 101, pretty basic stuff. Don't spend more than you have. What part of that can't you comprehend? No wonder so many people are so far in debt. It is time to pay the piper and tear up the credit cards for public agencies. They think there is no limit and it will all go away by itself.

This one is classic,

"The "they work for me" mantra is tell-tale condescending proof. It's also a ridiculously dumb way to paint the picture. Does the waitress at your favorite restaurant "work for you" too? Because the math works out that you would pay a higher percentage of her wages than you would a public employee in Contra Costa County."

LMAO, So you want to trade wages with a private sector waitress?
I bet you would enjoy their non-existent pension package too.
The fact still remains public employees do work for the public because that is who pays their wages.

To respond to your cry baby attitude on wages for public employees,
as I stated before, public employee wages can be as high as the income of the agency allows but not more. The problem is, people like you that want more of the funding dollars that is available thereby wrecking the system and dumping the problem on your children. That is truly a sad attitude of anyone to take. You probably think the 15 Trillion Dollar Country is also a non issue.

Why do you think it is OK to spend more money than you take in?
That is what you are trying to defend. I can't believe you think that.

Posted by JT
a resident of another community
on Mar 15, 2012 at 3:36 pm

I was just thinking as I read this and would like to suggest that everyone (public, private) utilize the same pension/SDI/SSI/401(k)/retirement system.

Why should congress and other public sector employees not have the same opportunity to be involved in a fully vested and funded program as private enterprise employees who have a combination social security and private investment opportunities enjoy. It was all have comparable plans and all pay into them equally then we should all have similar outlooks on them. NO MORE SEPARATE BUT EQUAL!

Posted by Say what?
a resident of another community
on Mar 15, 2012 at 3:38 pm

ECW, were you complaining 10 years ago when CALPERS investments were well above average and effectively alleviating you and the rest of us from some of the fiscal burden?

Didn't think so.

That's why your commentary is silly. You cry when times are tough, then do a disappearing act when times are good. Sounds like a therapy session for some of your own inner pain, quite frankly.

That's either the most horrible deflection attempt or you are slow to understand simple analogies. What makes the waitress not "work for you" anymore than the public sector employee on the other side of a counter in Martinez? The analogy was not about pensions. It's about simple exchange of money for services.

I guess assume or assert that government services should be free or at some cost that is less than the private sector? Why is it that you cannot explain the sacred mentality you take over dollars for one versus the other? You have been asked this question before and each time you dodge it.

Posted by Say this
a resident of another community
on Mar 15, 2012 at 4:59 pm

Hey Say What, I think you are forgetting that the paying public has a choice of which diner to frequent in our free market system. The owner (boss) decides how best to operate to maximize earnings and trust me, the owner (boss) does know how much her waitresses are paid and doesn't spend more than is brought in.

The paying public is the employer (boss) in the case of public services and while it can not go to the store down the street for services it most certainly has a right (obligation) to take interest in the management of the product.

If the public doesn't pay attention then the politicians will spend money they don't have and keep building up political support from those who benefit from the deficit spending.

Posted by Say what?
a resident of another community
on Mar 15, 2012 at 6:34 pm

@Say this

You are not getting the exchange of cash for services anymore than ECW has. You keep harping on this need to shop prices. Which is really just another way of you saying you don't way to pay these public employees anything. Or you don't want them to have a retirement plan. You're just not honest enough to come right out and say it.

Try using your analogy on your local utility company, for example. You sit there at your keyboard and insist you're not paying a dime more for electricity than you did 20 years ago. Let us know how you make out. I guess we'll know when you go silent after they have shut your power off.

Works the same in government. If you aren't willing to pay, then you go without the services. Be it cops or firemen or building and safety inspectors. Just don't complain when no one answers the phone when you call for that service. Some of this talk of late about "just say no" with respect to fire services is especially alarming. People playing chicken with safety. Really dumb, in my opinion.

Fact is labor and benefits costs continue to rise. It's not like desk clerks in County offices have suddenly become 6 figure wage earners. But that's the impression some here would have you believe. And what is this crazy nonsense about wild swings in wages/benefits should be tied to the economy? Does it operate that way where you work? If revenues are off by 30% you immediately get a 30% haircut on your paycheck?

The real problem here is you are ranting on about how much government cost without all the facts. Tax revenue as a percentage of GDP is at 50 year lows, so it's not like you're paying a bunch more. Government employees on a per capita basis are down some 30% from a generation ago on the federal level. While I don't have numbers for local government, I can't imagine it has bucked that trend.

If you want to talk or just complain about it, you're entitled. But to this point none of you have supplied any frame of reference. You are simply following some guy with an axe to grind who happens to work at a newspaper.

GG had a good one earlier. If you looked into the UC system, which would hit too close to home for bitter Dan, you would probably be shocked. 3@50 was handed to them. No negotiations, nothing. Just given to them. Then later more money was thrown at their employees without any of them even asking.

Where's the Borenstein reporting on that? Is he just a low hanging fruit kind of guy?

By the way, since we're mostly talking local government here, where did this crazy idea get started they can spend more than they take in? County has to balance their budget every year. That is done by cutting services or staff counts. This isn't the Feds who can just print money or borrow from the Chinese and maintain status quo.

Posted by [removed]
a resident of another community
on Mar 15, 2012 at 7:03 pm

Dear Editor,

This exchange continues several that started in a parking lot in Discovery Bay Safeway Parking Lot with a limited cast of characters, as two, that only want to argue individual opinions. It is quite like listening to one hand clapping because the brutality of commentary is isolating Dolores' Danville Weekly readership from review by rational consideration.

Certainly, insulting Daniel Borenstein and Lisa Vorderbrueggen is feeding even greater disregard for you and your on-line publication. It leads many to ask, "Where are you as editor?"

Get involved and use journalism to address this subject beyond campaign opinions!

Posted by Say this
a resident of another community
on Mar 15, 2012 at 7:31 pm

You asked :"...what is this crazy nonsense about wild swings in wages/benefits should be tied to the economy? Does it operate that way where you work? If revenues are off by 30% you immediately get a 30% haircut on your paycheck?"

Great question!

Yes, either wages, benefits or head count are among the first and most immediate items cut. The real world is tough. It's real tough.

You should try it sometime.

As for the UC system, I wish more people would talk and report on it. It is ridiculous to see the costs! I recall a BANG article last week pointing out the absurd costs when compared to private schools like Harvard and Yale as I recall. My assumption is that Mr. Borenstein is otherwise occupied and not avoiding the issue because of some alleged family conflict.

Most useful however, would be for the public service apologists to listen to the tax paying public and not twist and restate its words. Saying things like:"Which is really just another way of you saying you don't way to pay these public employees anything. ". Is silly, inaccurate, and dishonest. It does not move the conversation forward at all.

Some people on here feel they are not getting enough of the public pie. I am an executive or should I say former executive. The 30% comment was so off base. I have been part of the private sector 30% cut that the public employees seem to take for granted. Others have taken 30% less paying jobs or forced to leave. The public sector just retires them early then asks for more money or else.
When this Say What fellow starts talking about how efficient the government is and no one pays more now than they did 50 years ago it really says allot about his intelligence and character. Say What has got to be a crackpot thinking like this. It is the entitlement mentality that is ruining the country and the economy.
Anyone can balance a budget with creative projections, bonds, and as they did here in California by moving costs into the next year. Government style budget balancing could never work in the private sector.
There other trick government attempts to use is the basis for this discussion. False projections of revenue such as the pension system. This has compounded today's problems. Just look at the last state budget attempt. Now those public lawmakers that failed their job who previously passed a no pay rule with no budget are now suing the state with our tax dollars to pay them our tax dollars when they failed their job. That is the mentality that takers have. These types of moves by government are showing the negative results of their actions. Simply sticking your hand out for more taxes is becoming a bit tiring.